I had a similar problem when I first installed my XP Pro on my dual boot XP/Vista machine. I plugged in my Sandisk thumb drive (which has this virtual CD drive in it that auto launches this menu thing) and then my DVD RAM drive disappeared!
Unfortunately, the only way I could fix it was to reinstall the OS- which wasn't a big deal since I just installed it a few hours before.
Does BIOS still recognize your CD drive? It did in mine, but windows didn't. Howbout the external drive?
However, before doing this, I recommend updating, as Andy suggested, and perhaps running a few useful apps. If your version of Vista is 32 bit, you may be able to use Dial-a-fix http://wiki.djlizard.net/Dial-a-fix .
It fixes many known windows problems.
You may also want to try Microsoft's safety scanner: http://onecare.live.com/site/en-us/center/whatsnew.htm
To check for a variety of malware, clean up your registry, and do some other useful things.
For kicks, you should probably try running Trendmicro Housecall for a better check against malware and viruses
housecall.trendmicro.com
If those don't help, try booting off of your vista DVD (assuming bios still recognizes your drives) and assessing your options from there. The Vista DVDs are a lot more helpful for troubleshooting than the XP CD's were- they'll check out your system and do other useful things. Try running some of those checks (I'm not too familiar with all of them, but I remember it was pretty straightforward- I only did this once).
If its still a no-go, try doing a repair installation of vista.
As a final measure, a complete reinstall would most likely solve your issue, but SAVE THIS FOR LAST!
*note* Before beginning any of this, its probably best to back up your important files and folders onto some external media. Just in case.
All the best, and get back to us!
--The Comodore